Time-of-Use Rate Calculator

Electricity is unusual among commodities in that it cannot be stored at scale on the grid — it has to be generated at the instant it is consumed. That means the network must be built to survive its worst hour of the year, and the plant that runs only during those worst hours is the most expensive plant on the system. On a hot weekday afternoon, the marginal kilowatt-hour can cost a utility many times what it costs at three in the morning.

A flat rate hides all of that. Everyone pays the same average price, which means households that use electricity at expensive times are quietly subsidised by those that do not. A time-of-use tariff removes the subsidy by passing the cost structure through: cheap when the system is idle, expensive when it is straining.

The consequence, and it is worth being blunt about it, is that a time-of-use plan is not a discount programme. It is a price signal. If you switch and change nothing about when you run appliances, the most likely outcome is that your bill goes up — because the plan is designed so that average behaviour costs roughly the same or slightly more, and the saving is the reward for responding.

Time windows vary between utilities and often between summer and winter, but the shapes are recognisable.

The saving depends entirely on how much load you can genuinely move, and the honest list is shorter than the marketing suggests.

Two structural details cause more bad switching decisions than the energy rates themselves.

The first is the fixed monthly charge. Utilities sometimes attach a higher customer charge to their time-of-use plans, and a few dollars a month is a few dozen dollars a year — often most of the saving the energy rates were going to produce. It appears on the rate card as a small line item and it belongs in any honest comparison, which is why it has its own field above.

The second is seasonal rate structures. Many time-of-use tariffs have entirely different rates and different window definitions for summer and winter, and the summer peak rate is frequently the eye-watering one. A calculation done on annual averages, as this one is, will understate the pain of August and overstate the relief of March. If your utility publishes seasonal rates, run the calculation twice and weight the results by how much electricity you use in each season.

A third, smaller point: many utilities offer a bill-protection guarantee for the first year on a time-of-use plan, refunding the difference if you would have paid less on the flat rate. Where that exists, the downside of trying is close to zero and the calculation matters less than simply switching and watching.

Every number on this page is dominated by one input: the share of consumption that lands in the peak window. Guessing it produces a plausible answer rather than a true one, and the guess is usually low, because people underestimate how much of a household’s electricity is used between four and nine in the evening.

Almost every US utility with a smart meter now publishes interval data — usually hourly, sometimes every fifteen minutes — through its online account portal, generally as a downloadable file covering the past year or two. Sum the hours that fall inside the peak window, divide by the annual total, and the guess becomes a measurement.

This matters most for the households closest to the line. If your calculated peak share is far from the break-even figure in either direction, a rough estimate is good enough to decide. If it is within a few percentage points, only real data will tell you which side you are on.